Connecticut governor signs bill to regulate surveillance pricing
Connecticut has become second state in the nation to enact legislation aimed at curbing surveillance pricing, also known as personalized pricing.
Connecticut Governor Ned Lamont has signed HB 5563 into law. It will go into effect on July 1. It follows on the heels of similar legislation in Maryland, which was signed into law in April by Governor Wes Moore and is due to go into effect on Oct.1.
Most recently, legislators in New York passed the One Fair Price Act, which is now under consideration by New York Governor Kathy Hochul. Other states, including California and New Jersey, are considering similar bans.
Personalized pricing, occurs when companies use artificial intelligence and algorithmic to review consumers’ personal data, such as their browsing history, real-time location, inferred family size or income to set prices or discounts for consumers, according to Consumer Reports, which has helped champion efforts to restrict the use of data linked to individual shoppers to set prices.
In a statement, Consumer Reports said while the Connecticut law improves upon Maryland’s recently-enacted law in several key ways and offers important new protections for consumer, it still has significant shortcomings.
“Businesses may feel it permits personalized pricing so long as they increase list prices and then offer personalized discounts to certain consumers based on their perceived willingness to pay,” said Grace Gedye, senior policy analyst at Consumer Reports. “Nevertheless, the passage of this law represents real progress and demonstrates that states are committed to working on this affordability issue, and that they can improve the policy over time.”
Consumer Reports recommends the Connecticut legislature close loopholes and strengthen the bill next legislative session by:
•Tightening discount exemptions and conditioning them on public disclosure of the discounts and terms, so that businesses cannot secretly profile consumers and offer them different prices, and so that all consumers who are eligible for a discount can receive it; and
•Making clear that consumers can take legal action if their rights under the law are violated, rather than petitioning the Attorney General — whose resources are limited —t o act on their behalf
